VIRGINIA BEACH — Construction of the Atlantic Park surf project is well underway, but moving utilities underground has been a challenge and is costing more than originally budgeted.
The biggest factor is “unforeseen site conditions” encountered in the process of burying power lines around the perimeter of the project, according to Mike Culpepper, a principal of the development company Venture Realty Group. Venture is managing the utility contract.
The City Council on Tuesday approved moving $1.75 million from a fund dedicated to Atlantic Park’s parking to complete the offsite utility work. Vice Mayor Rosemary Wilson abstained citing a personal interest in Dominion Energy. Councilman Chris Taylor also abstained, saying he was not supportive of the funds being transferred but did not want to get in the way of the project moving forward.
L.J Hansen, city public works director, said it’s not unusual for construction projects that involve the relocation of utilities to run into unexpected costs.
“It happens,” Hansen said.
Atlantic Park is a $335 million public/private, mixed-use development, anchored by a surf lagoon. It will also feature restaurants, retail, residential, offices and an indoor/outdoor entertainment venue. Overall, the city is now footing more than $150 million to build Atlantic Park, including offsite infrastructure, parking and the entertainment venue. The city originally agreed to chip in $100 million toward the project.
World-renowned superstar and Virginia Beach native Pharrell Williams is one of the development partners. Atlantic Park is currently under construction on the site of the former Dome at the Oceanfront, between 18th and 20th streets.
The offsite infrastructure work includes decommissioning a power substation on 18th Street, undergrounding utilities, and adding traffic signals and pedestrian crossings. It’s around 35% completed and is expected to be finished in 2025, Culpepper said.
Meanwhile, construction of the surf lagoon, two parking decks and the entertainment venue are moving ahead. Those elements of the project are scheduled to open late next year, Culpepper said.
The latest approved city budget allocates $33 million for offsite infrastructure, which is $15.3 million more than the city’s initial funding of $17.7 million in 2021. The city’s decision to bury the power lines contributed to the increase, Culpepper said.
To cover the hike in utility work, money was taken from a sports tourism fund during last-minute budget decisions in May. The additional $1.7 million approved Tuesday brings the total cost up for offsite infrastructure up to $34.7 million.
Virginia Beach has designated $49.5 million for parking and plans to build 1,400 parking spaces. The price is capped at $30,000 per space, or $42 million for the 1,400 spaces, leaving extra money available for other parts of the project, according to city documents.
Money has been transferred to offsite infrastructure previously. In fiscal year 2022-23, $3.7 million came from the Atlantic Park Development Acquisition fund and another $1.5 million was taken from Atlantic Park Streetscapes this year.
Stacy Parker, 757-222-5125, [email protected]
